The Four Things a Service Business Must Get Right

Extensive study of the world’s best service companies reveals the principles on which they’re built.

Must Get Right

by Frances X. Frei

AS THE WORLD’S MAJOR ECONOMIES

The Four Things a Service Business

have matured, they have become dominated by service-focused businesses. But many of the management tools and techniques that service managers use were designed to tackle the challenges of product companies. Are these sufficient, or do we need new ones?

Let me submit that some new tools are necessary. When a business takes a product to market, whether it’s a basic commodity like corn or a highly engineered offering like a digital camera, the company must make the product itself compelling and also field a workforce capable of producing it at an

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The Four Things a Service Business Must Get Right

attractive price. To be sure, neither job is easy to do well; may attribute convenience or friendly interaction to your enormous amounts of management attention and academic service brand. They may compare your offering favorably research have been devoted to these challenges. But deliverwith competitors’ because of extended hours, closer proximing a service entails something else as well: the management ity, greater scope, or lower prices. Your management team of customers, who are not simply consumers of the service must be absolutely clear about which attributes of service but can also be integral to its production. And because custhe business will compete on. tomers’ involvement as producers can wreak havoc on costs, Strategy is often defined as what a business chooses not service companies must also develop creative ways to fund to do. Similarly, service excellence can be defined as what a their distinctive advantages. business chooses not to do well. If this sounds odd, it should. Any of these four elements – the...